When a person ends up having a lot of debt over his r her credit cards, the cibil score seems to get affected of the amount is not paid on time. People mostly miss on due payments and installments every month and that seem to proportionally decrease the cibil score. The cibil score plays a very important role in taking up loans or applying for more credit cards. Banks refuses the application of a loan in case the cibil score of the applicant is not good. Credit card refinancing is a nice option to settle all the credit card debts and maintain a nice reputation with the bank by keeping up the cibil score. There are few things that one must take care of before applying for credit card refinancing.
What is credit card refinancing?
Refinancing of a credit card means that the debts can take up a loan of the debt amount and settle the credit card debts. It is like taking up a new loan in order to settle down the current debts. The advantage of refinancing lies in the fact that the firm that helps the debtor for such consolidations usually has very low interest rates and hence one finds it easy to handle this new debt when compared to the credit card debts.
Things that one must see and calculate before going for credit card refinancing includes some steps- Firstly, a person must calculate all the debts that he or she has to pay. Not only the debt amount from various debtors and the bank but also if there are any fees or penalties remaining must be calculated. Secondly, the debtor must find out the ration of his monthly income and monthly expenditure and see how much he or she can pay on a monthly basis as installment to the debt consolidation firm. One must look or manage for the highest amount possible to minimize the load of the debt. thirdly, one must find out the best debt consolidation firms and draw a comparison between their performance, customer’s review, reputation in the market and of course the rate of interest that they charge.
One must also try to get in term with the debt consolidation firm professionals and take their advice on such matters. Most of the firms allow their professionals to get in contact with the current creditors and have a negotiation meeting on the debt amount. When the debts are to be paid off in a bulk, the creditors do agree to negotiate on the amount. Such negotiation would mean a nice deduction on the loan to be taken and hence would only prove beneficial for the debtor. One must also check all the odds and evens of the credit card refinancing company before investing in to it. One must surely check about the fees and the penalties that the credit card refinancing might charge as one surely would not like to land up with added fees and unknown penalties that would only make it tough for the debtor to pay the debts.
